Health Care Fraud, Waste & Abuse in 2021 - Allison D. Shelton Brown & Fortunato, P.C - ACHCU
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Health Care Fraud, Waste & Abuse in 2021 Beth Anne Jackson Allison D. Shelton Brown & Fortunato, P.C. Brown & Fortunato, P.C.
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Topics
▪ Laws Frequently Utilized in Enforcement Actions
▪ Health Care Fraud and Abuse Control Program
▪ Recent Cases, Actions, and Settlements
• Medical Directorships
• Relationships with Excluded Individuals
• Non-compliance with Medicare Coverage Criteria and Standards
▪ Recent OIG Audits of Home Health and
Hospice Providers
▪ Where We’re Headed in 2021
ACHCU Is a Brand of ACHC.
Fraud, Waste, & Abuse Laws False Claims Act, Anti-Kickback Statute, and the Stark Law
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False Claims Act, 31 U.S.C. § 3729
▪ “Any person who . . . knowingly presents, or causes to be presented, a false or fraudulent
claim for payment or approval; . . . or knowingly conceals or knowingly and improperly
avoids or decreases an obligation to pay or transmit money . . . to the Government, is
liable to the United States Government for a civil penalty . . . plus 3 times the amount of
damages.”
• Civil Monetary Penalties (CMPs) up to ~$22,000 per claim
• Treble damages
ACHCU Is a Brand of ACHC.
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False Claims Act, 42 U.S.C. § 1320(a)-7b(a)
▪ “Whoever . . . knowingly and willfully makes or causes to be made any false statement or
representation of material fact for use in determining rights to such benefit or payment . .
. shall . . . be fined . . . or imprisoned . . . or both.”
• Fine up to $25,000 per violation
• Imprisonment up to 10 years per violation
ACHCU Is a Brand of ACHC.
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Anti-Kickback Statute (AKS),
42 U.S.C. § 1320a-7b(b)
▪ “Whoever knowingly and willfully solicits or receives any remuneration . . . in return for referring an
individual . . . or in return for . . . ordering . . . or recommending purchasing . . . or ordering any . . .
facility, service, or item for which payment may be made . . . under a Federal health care program . .
. shall be fined . . . or imprisoned . . . or both.”
▪ “Whoever knowingly and willfully offers or pays any remuneration . . . to induce [a] person to refer
an individual . . . or to . . . order . . or recommend . . . purchasing . . . or ordering any . . . services, or
item for which payment may be . . . under a Federal health care program . . . shall be fined . . . or
imprisoned . . . or both.”
• Criminal fine of up to $25,000 and imprisonment for up to five years.
• Exclusion
• CMP up to $50,000 per violation
• Liability under FCA
ACHCU Is a Brand of ACHC.
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Stark Law, 42 U.S.C. § 1395
▪ “[I]f a physician (or an immediate family member of such physician) has a financial
relationship with an entity . . . then the physician may not make a referral to the entity for
the furnishing of designated health services . . . and the entity may not present or cause to
be presented a claim . . . to any individual, third party payor, or other entity for designated
health services furnished pursuant to a [prohibited] referral.”
• Refund of amounts collected
• CMPs of up to $15,000 for each service
• Exclusion
• CMP of up to $100,000 for each circumvention scheme
• Liability under the FCA
ACHCU Is a Brand of ACHC.
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Other Laws Used in Enforcement Actions
Conspiracy to Submission of Theft or
Travel Act Defraud Fraudulent claims Embezzlement
18 U.S.C. § 1952 18 U.S.C. § 286 18 U.S.C. § 287 18 U.S.C. § 669
Making False Using Mail to Scheme to Defraud
Health Care Benefit Money Laundering
Statements Defraud
Program
18 U.S.C. § 1035 18 U.S.C. § 134 18 U.S.C. § 1347 18 U.S.C. § 1956
Racketeering
Activity
18 U.S.C. § 1961
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Health Care Fraud and Abuse Control Program (HCFAC) Background, Collections, Enforcement Agencies
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HCFAC Background
▪ Established under HIPAA
▪ Directed by Attorney General and HHS Office of Inspector General
▪ Coordinates enforcement activities among all levels of government
▪ Collaborations
• Health Care Fraud Prevention and Enforcement Action Team (HEAT)
• Health Care Fraud Prevention Partnership
• Data Integration and Analytics
ACHCU Is a Brand of ACHC.11
HCFAC Enforcement Agencies
HCFAC
Department of Health and
Human Services Department of Justice
▪ HHS Office of Inspector General (OIG) ▪ United States Attorneys
▪ Office of Audit Services ▪ Civil Division
▪ Office of Evaluation and Inspections ▪ Criminal Division
▪ Office of Investigations ▪ Civil Rights Division
▪ Office of Counsel to the Inspector General ▪ DOJ Office of Inspector General
▪ Centers for Medicare and Medicaid Services (CMS) ▪ Federal Bureau of Investigations
▪ Unified Program Integrity Contractors
▪ Administration on Community Living
▪ Office of the General Counsel
▪ Food and Drug Administration
ACHCU Is a Brand of ACHC.12
HCFAC Results
Billions of Dollars Won, Negotiated, and
Collected Under HCFAC Program
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3.5
3
2.5
2
1.5
1
0.5
0
FY 2016 FY 2017 FY 2018 FY 2019
Won or Negotiated Collected
Source: OIG, Health Care Fraud Abuse Control Program Reports, FY 2016-2019
ACHCU Is a Brand of ACHC.13
$1.37 Billion in Expected Recoveries
OIG Investigative 221 Criminal Actions
Work
CMPs Imposed Against 272 Individuals and
Oct. 1, 2020 – Mar. 31, 2021 Entities
Excluded 1,036 Individuals and Entities
Source: OIG, Semiannual Report to Congress (Oct. 1, 2020 - Mar. 31, 2021) ACHCU Is a Brand of ACHC.Cases Involving Medical Directorships Recent Settlements, Lessons Learned & Best Practices
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Doctor’s Choice Home Care Inc.
▪ $5.8 Million Settlement
▪ Announced November 20, 2020
▪ Sham medical director agreements with
physician to providing remuneration for
referrals
▪ Paid employees bonuses for physician
spouses’ referrals
ACHCU Is a Brand of ACHC.16
Provident Home Health & Hospice
▪ $1.05M settlement by former owner
▪ Medical Directorship payments exceeded fair market value
▪ Period of 2 years
▪ Induce referrals to Home Health and Hospice
▪ False claims submitted
• “Attending physician” was in prison
• License was suspended
▪ 5-year period of exclusion
ACHCU Is a Brand of ACHC.17
Lessons Learned & Best Practices
▪ Structure arrangements under available Stark exceptions and AKS safe harbors
• 42 C.F.R. § 411.357(d) – Stark exception for Personal Service Arrangements
• 42 C.F.R. § 1001.952(d) – AKS safe harbor for Personal Services and Management Contracts
▪ Key Considerations for Compliance
• Written agreement covering services actually provided
• Arrangement is reasonable and necessary for legitimate business purposes
• Compensation is consistent with fair market value and does not take into account referrals or
business generated between the parties
▪ Best Practices
• Documentation of FMV evaluation and need for services
• Time sheets
ACHCU Is a Brand of ACHC.Excluded Individuals
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Provider-Self Disclosure Protocol
▪ 2020 Settlements under OIG Provider-Self Disclosure
• 63 total settlements
• 22 arose from the OIG’s allegations that the provider
employed or contracted with a person the provider knew
or should have known was excluded from participation in
federal health care programs
• Approximately $2,271,044 will be paid as a result of such
settlements
▪ Settlements between January and May 2021
• 4 settlements based on alleged engagement of an
excluded person
• Approximately $515,199 will be repaid
ACHCU Is a Brand of ACHC.20
Settlement Agreement (4/12/2021)
▪ CareCo Medical, Inc. of Waterford, CT
▪ Employed excluded physical therapist in a management position
▪ $28,246 to be paid
▪ HHS-OIG/US DOJ pursued
ACHCU Is a Brand of ACHC.21
Lessons Learned
“The OIG may impose a penalty; an exclusion; and, where authorized, an assessment
against any person who it determines. . . [a]rranges or contracts (by employment or
otherwise) with an individual or entity that the person knows, or should know, is excluded
from participation in Federal health care programs for the provision of items or services for
which payment may be made under such a program.” 42 C.F.R. 1003.200
▪ Provider liability arises when “an excluded person participates in any way in the
furnishing of items or services that are payable by a Federal health care program.”
• OIG, “Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health
Care Programs,” (Issued Sept. 1999; updated May 2013)
ACHCU Is a Brand of ACHC.22
Best Practices
▪ Regularly conduct background screenings and document searches
• All new employees and independent contractors
• Periodic screening of current employees and contractors
• Databases
• OIG’s List of Excluded Individuals and Entities (LEIE)
• GSA’s System for Award Management (SAM)
▪ Include representations and warranties regarding exclusions in contracts
▪ Ensure submission of accurate and complete information on CMS 855 forms/PECOS and all
other enrollments and applications to federal and state health care programs
ACHCU Is a Brand of ACHC.Cases Involving Coverage Criteria, Medicare Standards & More Extreme Cases: Criminal Charges & Prison Time
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Owner of Texas chain of hospice companies sentenced for $150m health
care fraud and money laundering scheme (12/2020) - MERIDA HEALTH CARE
GROUP
▪ Jury trial “Financial healthcare fraud is
▪ Rodney Mesquias told thousands of patients with abhorrent enough, but to fraudulently
Alzheimer’s and dementia that they had less than diagnose patients with dementia or
Alzheimer’s is the pinnacle of medical
6 months to live cruelness to both the patient and
▪ Enrolled them in hospice their family. They falsely gave patients
life ending diagnosis and they will pay
▪ 240 months in federal prison the price with years behinds bars.”
▪ $120M in restitution
— U.S. Attorney Ryan K. Patrick , S.D. Tex.
ACHCU Is a Brand of ACHC.25
Hospice administrator sentenced for role in hospice
fraud scheme (2/19/2021)
▪ Overruled clinical staff who determined
beneficiary referrals did not qualify for
hospice
▪ Paid kickbacks to recruiters
▪ $2.2 M in restitution
▪ 30 months in prison
ACHCU Is a Brand of ACHC.26
Common Allegations Against Hospice Providers
▪ Incorrect diagnosis of patient as terminally ill
▪ Failure to document a bona fide face-to-face exam of patient took place
▪ Shortfalls in physician certification documentation
and medical records so that care does not appear
to be warranted
▪ Illegal marketing practices
▪ Incorrect level of care
ACHCU Is a Brand of ACHC.27
Common Allegations Against Home Health
Providers
▪ Beneficiaries not meeting the definition of “confined to the home”
▪ Beneficiaries not in need of skilled services
▪ Failure to submit OASIS data in timely manner
▪ Failure to adequately document services
▪ OASIS data does not support HIPPS payment code
▪ Plan of care not followed
▪ Plan of care not properly certified and recertified (not under care of physician)
ACHCU Is a Brand of ACHC.28
Best Practices
▪ Conduct internal and external audits
• Implement ongoing, routine process for regular audits and appropriate corrective actions
• Identify and audit areas of potential non-compliance within organization
• Issues identified in payor audits
• Available data comparing organization’s
performance to peers
• Review areas deemed high risk by
governmental agencies
ACHCU Is a Brand of ACHC.29
Best Practices
▪ Implement effective compliance program
• Identify potential compliance issues
• Hotline
• Exit interviews
• Log compliance concerns, investigate, and track
responsive actions
ACHCU Is a Brand of ACHC.OIG Medicare Provider Compliance Audits Late 2020 - Present
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OIG Audits In Late 2020 - Present
Provider Date Claims at Associated Extrapolated Issues
Issue Amount Amount
VNA of Maryland 4/27/21 36/100 $25,295 $2.1M Beneficiaries not homebound and did not
19/100 need skilled services; incorrect payment
codes; services not rendered in
accordance with plan of care
Brookdale Home 2/25/21 46/100 $132,500 $3.3M Beneficiaries not homebound and did not
Health need skilled services
Tidewell Hospice 2/22/21 18/100 $46,569 $8.3M Terminal prognosis not supported; level of
care not supported; services not eligible
for reimbursement
SE Home Health 1/13/21 29/100 $46,404 $1.8M Beneficiaries not homebound and did not
Services 18/100 need skilled services; incorrect payment
codes
Tender Touch 12/22/20 27/100 $42,229 $478,780 Beneficiaries not homebound and did not
Health Care Servs 21/100 need skilled services
Hospice 12/16/20 68/100 $80,307 $3.4M Terminal prognosis not supported; services
Compassus 35/100 not documented; NOE not timely filed
ACHCU Is a Brand of ACHC.32
Best Practices – Responding To
OIG Audits
▪ Hire a lawyer AND an expert
▪ Dispute claims that you disagree with
• Explain why
• Supply additional medical records
• Medical review contractor will review and often change at least some claims
• Reduce basis for extrapolation
▪ Understand your obligations after an audit
• Obligations under 60-day rule
ACHCU Is a Brand of ACHC.Where We’re Headed In 2021 OIG Work Plan
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OIG FY 2021 Work Plan
▪ Joint Work with State Agencies (expected FY 2021)
• OIG will partner with state auditors and others to provide effective methods that address
improper payments in Medicaid programs such as home health, hospice, DME.
▪ Home Health Agencies’ Challenges and Strategies in Responding to the COVID-19
Pandemic (expected FY 2022)
• This study is expected to provide insights into the strategies that HHAs have used to address
the challenges presented by COVID-19, including how well emergency preparedness plans
served HHAs during the pandemic.
▪ Audit of Home Health Services Provided as Telehealth During the COVID-10 Public
Health Emergency (expected FY 2022)
• OIG to evaluate if services furnished via telehealth were billed in accordance with Medicare
rules.
ACHCU Is a Brand of ACHC.Questions?
Thank You! Beth Anne Jackson, J.D. Allison D. Shelton, J.D. Brown & Fortunato, P.C. Brown & Fortunato, P.C. 905 S. Fillmore, Ste. 400 905 S. Fillmore, Ste. 400 Amarillo, TX 79101 Amarillo, TX 79101 bjackson@bf-law.com ashelton@bf-law.com 806-345-6346 806-345-6338
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